China's venture capital industry will enter its golden age when more sophisticated investors move in and the country's legal structure is improved, said senior officials and venture capital investors during a forum yesterday.

Despite nearly 60 percent of venture capital projects in China posting a loss last year, the future looks bright, said Wang Yuan, executive vice president of China Research Institute for Technology Development under the Ministry of Science and Technology.

According to Wang, there were 345 venture capital institutions last year, with 37 new players and 11 ending their operations.

With a total investment of 63.4 billion yuan (US$8.45 billion), 57 percent of the 4,000-plus projects conducted by venture capital investors lost money last year.

"The bad performance was mainly due to the limited level of internal management, lack of credibility, deficiency of sourcing funds and changeable policies," said Wang.

"However, with more experienced investors bringing maturer global practices, China's venture capital industry will see a better future."

China has been beefing up efforts to protect intellectual property rights. Also, the country has made the growth of high-tech and innovation industries - the favorite target of venture capitalists - a national strategy to drive the economy.

On Monday, the United States' San Francisco Bay Area Council announced its US$200-million venture capital fund in the Yangtze Delta Region, with Shanghai's Knowledge & Innovation Community in northeast Yangpu District as an operation base.

The fund will target companies in the region with businesses including green technology, information technology, advanced manufacturing, finance, logistics, healthcare and education.

More than 30 delegates from the Bay Area, where Silicon Valley is located, Silicon Valley, visited Shanghai and nearby cities this week to look for potential partners. So far, they have found 65 projects as candidates.

"The former failures of venture capital practices in China won't dampen our confidence. The experiences of the Bay Area tell that the number one rule for venture capital is to tolerate failures," said one delegate while commenting on Wang's speech.

"Venture capital investors should be more patient with startup companies by staying with them and giving them funds for a longer time. And the market needs more sophisticated venture capital management," he said.